London Town re-opens 125 pubs in 4 months

London Town has re-opened 125 pubs in the four months to March this year — and created 550 jobs in the process.

The company has embarked on this ambitious strategy on the basis that too many pubs have been closed for the wrong reasons and remain viable and indeed profitable businesses given the correct level of support and investment.

London Town operations director Russell Cawtherey said: "By reassessing what our pubs were offering, it became clear that many should never have been closed in the first place.

"We also ran the numbers and saw that it was much more cost-effective to open the doors and offer a small but steady number of customers somewhere to socialise, relax and enjoy themselves.

"By taking the time to deliver what regular customers want, we have been able to revitalise many flagging establishments."

After being closed for over nine months, the Queens Head in St Austell is consistently hitting weekly sales of £5,000 a week, while the Three Jolly Sailors in Scarborough has been averaging sales of £4250 a week, of which 75% is spent on food, despite closing over the Christmas period.

Re-opening service​

The successful programme was launched within London Town's estate by Cawtherey. However, chief executive Billy Buchanan, who took the helm at London Town last year, identified re-opening pubs as a service that could be offered to others.

Providing the service commercially has already proved hugely successful and Enterprise Inns and Punch Taverns are now working in partnership with London Town to address potential closures within parts of their own estates.

Around 125 pubs have been reopened under London Towns' management in the four months to the end of March 2009, equating to around eight per week.

Colin Pedrick, managing director operations at Enterprise Inns, said: "We have found London Town very quick to respond and on many occasions we have been able to prevent potential closures through working with London Town. We have also been able to maximise the performance of other pubs that may not have closed, but were certainly struggling for a variety of reasons."

He added: "London Town offers a unique insight into the pubs that they manage for us and their complete transparency allows us to compare past and present performance of these venues.

"In many cases it has shown that pubs were struggling simply because previous lessees had lost interest or were not managing the business effectively. With the help of London Town we have been able to address these issues and reverse the damage that has been done to some pub businesses."

Pedrick added: "We began working with London Town in November 2008 and through our partnership have been able to demonstrate that some of our assumptions about the reasons for business failures are proving to be correct. A lot of the houses that were deemed to be failing are being rebuilt into attractive propositions and we expect to be letting them on the back of the work done by our own field staff and those of London Town."

Broadening the business​

Buchanan added: "I have certainly seen an increase in the people looking at taking leases or tenancies in the last six months and I can see this continuing. People are looking for a steady income in uncertain times and where a pub can prove it provides a steady income stream they will become highly sought after.

"It is also important to remember that many pubs offer accommodation which is another highly attractive feature for potential tenants. If you get the right people in the right environment and the right support success will follow."

The re-opening programme has allowed Buchanan to broaden London Town's business and it sits very comfortably with the existing tenanted and managed estates divisions.

The tenanted estate comprises 206 pubs, mainly in England and Wales. There are 48 pubs in its managed estate of which 24 belonging to Punch and 14 to Enterprise.

The managed services division has just won another contract to manage a 19-house tenanted estate.

All three divisions are growing strongly, backed by supportive investors who provided a significant cash injection in December. Buchanan, in turn, is a firm believer in high-quality, practical support for tenants within the estate and has created an in-house telesales capability to assist with this.

London Town have also substantially beefed up its operations team, which is responsible for the re-openings, and greatly improved the ratio of operations managers to pubs, again with the aim of providing meaningful support in difficult times.

Buchanan said: "It was clear to me when I joined London Town that we needed to radically change what we did and the way we did it if we wanted to get the results that our investors expect, and provide the service that our customers want.

"We are in a difficult business at a difficult time, but to date we have shown that with a good team of people and the right strategy it is possible to improve our overall performance by consolidating in some areas and expanding and growing in others.

"It is about offering the right service to each of our customers, whether it is other pub companies through our managed services division, the end user through our managed division or our tenants in our owned estate.

"We have just taken our telesales for our tenants in-house and this will allow us to offer a better service to them. We have also negotiated some good supplier support which we will be able to offer to our tenants through our own dedicated people."